Cancer stem cells (CSCs) also known as cancer-initiating cells (CIC), are responsible for the sustained and uncontrolled growth of malignant tumors and are proposed to play significant roles in metastasis and recurrence. Several hypotheses have proposed that the events in either stem and/or differentiated cells, such as genomic instability, inflammatory microenvironment, cell fusion, and lateral gene transfer, should be considered as the possible origin of CSCs. However, until now, the exact origin of CSC has been obscure. The development of induced pluripotent stem cells (iPSCs) in 2007, by Yamanaka's group, has been met with much fervency and hailed as a breakthrough discovery by the scientific and research communities, especially in regeneration therapy. The studies on the development of CSC from iPSCs should also open a new page of cancer research, which will help in designing new therapies applicable to CSCs. Currently most reviews have focused on CSCs and CSC niches. However, the insight into the niche before the CSC niche should also be of keen interest. This review introduces the novel concept of cancer initiation introducing the conversion of iPSCs to CSCs and proposes a relationship between the inflammatory microenvironment and cancer initiation as the key concept of the cancer-inducing niche responsible for the development of CSC.